Plato Global Shares Income A aims to provide an annual yield that exceeds the yield of the MSCI World ex Australia, Net Returns Unhedged Index after fees. The Fund also aims to outperform the MSCI World ex Australia, Net Returns Unhedged Index. The Fund aims to provide an annual yield that exceeds the yield of the MSCI World ex Australia, Net Returns Unhedged Index after fees. The Fund also aims to outperform the MSCI World ex Australia, Net Returns Unhedged Index.
For the month ended 30 September 2023, the Plato Global Shares Income Fund (Class A) (‘Fund’) returned -3.3% (after fees), strongly outperforming a weak benchmark, which fell -4%. The Fund distributed 0.4% of income. Since inception, the Fund has delivered +6.0% p.a. net yield from global equities, exceeding the investment objective to deliver +4% more income than the benchmark, which has only yielded 1.7% p.a.
Global markets were again challenged, but without the benefit to local investors of a significantly weakened Aussie dollar. The AUD (AUDUSD -0.8%) did fall moderately, given the backdrop of USD strength and weak Chinese data. The main driver of weak markets was the rise in global bond yields and stubborn inflation expectations in the US. US markets showed broad weakness (S&P 500 -4.9%, Nasdaq -5.8%) the growth-oriented Nasdaq impacted the most by high rates. Within the headline US index, Energy was the only sector that ended the month in positive territory, a result of the rise in crude oil prices. This price rise, along with weak economic data in Germany and a 25bp rise from the ECB, weighed on European markets (Germany -3.5%, France -2.5%). The UK (+2.3%) did offer some respite
This picture was echoed in Asia (Japan -2.3%), with additional pressure from continued concerns around Chinese growth. Such market moves impacted Gold (-4.7%), whilst oil (WTI US $$/bbl +8.6%) rallied significantly on supply side news from Russia and Saudi Arabia extending their cuts.=
The Fund continued to generate strong excess income. From a country perspective the drivers were in Asia, with strong dividends from Japan and Hong Kong. At the sector level substantial income came from Financials, followed by Real Estate companies. Stock examples of these exposures include Hong Kong Real Estate company, Swire Pacific Ltd, and Japanese financial, Japan Post Holdings Co Ltd. The Plato model invests in such companies to benefit from substantial regular and special dividends.
The relative underperformance of growth created a tailwind for the strategy (MSCI World Growth -5.7%, MSCI World Value -3% in USD). The Fund also benefitted from strong stock selection in Israel and Japan, overcoming a small detraction from Switzerland. From a sector perspective, the main outperformance came from Health Care and Financials. Positive stock selection in the Health Care sector was driven by UnitedHealth Group Inc.
The Fund remains actively positioned to seek superior income for low tax investors, whilst maintaining full equity capital exposure and diversification to both global developed countries and sectors.
What is Plato Global Shares Income A Plato Global Shares Income A is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Income Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Plato Global Shares Income A has Assets Under Management of 62.82 M with a management fee of 0.99%, a performance fee of 0.00% and a buy/sell spread fee of 0.3%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Plato Global Shares Income A has returned 1.88% in the last month. The previous three years have returned 11.47% annualised and 12.14% each year since inception, which is when the Plato Global Shares Income A first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Plato Global Shares Income A first started, the Sharpe ratio is 0.51 with an annualised volatility of 12.14%. The maximum drawdown of the investment product in the last 12 months is -3.79% and -21.56% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Plato Global Shares Income A has a 12-month excess return when compared to the Foreign Equity - Large Income Index of 6.06% and -0.3% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Plato Global Shares Income A has produced Alpha over the Foreign Equity - Large Income Index of 0.52% in the last 12 months and -0.1% since inception.
What are similar investment products?
For a full list of investment products in the Foreign Equity - Large Income Index category, you can click here for the Peer Investment Report.
What level of diversification will Plato Global Shares Income A provide?
Plato Global Shares Income A has a correlation coefficient of 0.97 and a beta of 0.97 when compared to the Foreign Equity - Large Income Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Plato Global Shares Income A and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Plato Global Shares Income A with the Developed -World Index?
For a full quantitative report on Plato Global Shares Income A compared to the Developed -World Index, you can click here.
Can I sort and compare the Plato Global Shares Income A to do my own analysis?
To sort and compare the Plato Global Shares Income A financial metrics, please refer to the table above.
Has the Plato Global Shares Income A been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
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Comments from SMSF Mates
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Performance Commentary - August 31, 2023 For the month ended 31 August 2023, the Plato Global Shares Income Fund (Class A) (‘Fund’) generated a positive total return of +2.4% (after fees), strongly outperforming the benchmark. The Fund distributed 0.5% of income. Since inception, the Fund has delivered +6.0% p.a. net yield from global equities, exceeding the investment objective to deliver +4% more income than the benchmark, which only yielded 1.7% p.a.
When viewed in local currency terms, global markets were challenged throughout August. Weak US markets (Nasdaq -2.2%, SP500 -2.4%), were driven by concerns over the Chinese economy, especially around real estate, elevated yields, and a Fitch downgrade. Energy was the only sector in the S&P 500 that recorded a positive month. European and Asian markets followed suit, with similar pressures compounded by a 0.25% hike from the BoE in Europe (UK -3.4%, Germany -3%, Japan -1.7%, Hong Kong -8.5%). Improving sentiment regarding Chinese stimulus and predictions of peaking global interest rates provided a small rally into month end, but it was too little too late. Oil (WTI +2.2%) jumped on the back of output cuts being extended from both Saudi Arabia and Russia. The Aussie dollar fell, driven by a strong US dollar and weakening Chinese economy. The index was down -2.3% in USD terms, however a weak Aussie dollar (-3.5% v USD) converted a negative return to a positive return (+1.6%) when based in AUD.
The Fund continued to generate strong excess income. From a country perspective the drivers were the USA and the UK. At the sector level substantial income came from Financials, followed by Industrials. Stock examples of these exposures include Singaporean industrial, Singapore Airlines, and UK financial, HSBC Holdings Plc. The Plato model invests in such companies to benefit from substantial regular and special dividends.
Performance Commentary - May 31, 2023 For the month ended 31 May 2023, the Plato Global Shares Income Fund (Class A) (‘Fund’) delivered a net yield of +1.5% and a positive total return of +1.6% (after fees), outperforming a positive benchmark. Since inception, the Fund has delivered +6.1% p.a. net yield from global equities, exceeding the investment objective to deliver +4% more income than the benchmark.
In USD terms global markets were weak, although a falling Aussie dollar boosted returns for Australian investors when converted to base currency. Risk off sentiment, weak domestic jobs and Chinese data put pressure on the local dollar (AUDUSD -1.7%). In the US optimism on the debt ceiling deal and strength in the tech sector, driven by demand for AI processing products, offset the weakness in energy stocks (S&P 500 +0.3%, Nasdaq +5.8%). In Europe commodity weakness and a pullback in luxury discretionary products was too much for any tech strength and led to a strong market decline (France -5.2%, UK -5.4%). Asia was further impacted by weaker than expected Chinese PMI data, although Japan rallied on strong domestic results and a weaker Yen (Hong Kong -8.4%, Japan +7%). Global growth concerns, and weaker Chinese data, saw a fall in demand for oil and hence negative price action (WTI -11.3%).
The Fund continued to generate strong excess income, helped by the fact that European companies pay substantial dividends at this time of year. From a country perspective the drivers were Germany and Norway. At the sector level substantial income came from Materials and Financials. Stock examples of these exposures include French Financial, A2A Spa, and German materials business, Heidelbergcement. The Plato model rotates into such companies to benefit from substantial regular and special dividends.
The Fund outperformed, despite headwinds due to the relative outperformance of large cap (MSCI World Small Cap -3%, MSCI World Large Cap -0.8% in USD), growth companies (MSCI World Growth +2.4%, MSCI World Value -4.9% in USD). The Fund benefitted from strong stock selection in the US and UK. This is one of the strategy benefits, allowing income to be generated from European holdings and excess return being found elsewhere in the portfolio. From a sector perspective, the main outperformance was in IT, in contrast to the previous month. Positive stock selection came from positions in Broadcom and NVIDIA, held for strong expected returns, which benefitted from the run in AI exposed stocks.
The Fund remains actively positioned to seek superior income for low tax investors, whilst maintaining full equity capital exposure and diversification to both global developed countries and sectors.
Performance Commentary - October 31, 2022 For the month ended 31 October 2022. the Plato Global Shares Income Fund (Class Al (‘Fund’) delivered o net yield of 0.3% after fees and a total return of -8.2% after fees. outperforming a strong index (+7.8%). Over the last 12 months the fund has outperformed the index by +1.9%. after fees. Since inception. the Fund continues to deliver 6% p.o. net yield from global equities after fees, which is 4.2% p.o. more than the Benchmark.
In October. Global equity markets reversed recent losses, posting a strong month. The main driver was the surging Energy sector. supported by o strong oil price (WTI +8.9%). Although still positive, the US tech sector pored bock of the end of the month, os markets positioned for the anticipated Fed rote increase (S&P 500 .8%. Nosdaq +3.9%). European markets followed suit. despite recessionary concerns and politico) turmoil in the UK (UK .2.9%. Germany .9.4%). Asian markets were mote mixed. Hong Kong experiencing contagion from Chino, where policy was not supportive for the struggling retail sector and the leading party underlined their commitment to Zero Covid (Nikkei +6.4%. Hong Kong -14.7%). Gold 1-1.6%) continued a downward slide, driven by increasing US rates and consequently rising treasury yields. The local currency remained relatively flat. with rate increases offset by Greenback strength.
Performance Commentary - September 30, 2022 For the month ended 30 September 2022. the Plato Global Shores Income Fund (Class AI (‘Fund’) delivered a net yield of 0.4% and total return of -3.7% after fees, underperforming a weak index (-3.2%). Since inception, the Fund continues to deliver 6% p.a. net yield from global equities. which is 4.3% p.a. more than the Benchmark. This is despite the fall in market yields over recent years.
In September. Global equity markets furthered the losses felt during the previous month. Despite positive payroll data, US markets posted severe falls, driven by high inflation. the subsequent requirement for the Fed to raise interest rates and the potential for that to result in o recession (S&P500 -9.3%, Nasdaq -10.5%). The rote sensitive real estate sector was the worst performer (S&P 500 Real Estate -13.6%). These themes impacted all regions globally. Sentiment in European markets was also impacted by the annexation of regions in Ukraine and both bond and currency issues in the UK. driven by the new governments mini budget (UK -5.4%. France -5.9%). Asian markets further reflected Chinese lockdowns in the region. (Hong Kong -13.7%). Despite its safe haven status. Gold was pushed lower by rising US yields and a stronger US dollar (Gold -3%). The stronger US dollar also drove oil and the Aussie dollar lower (WTI -11.2%. AUDUSD •6.5%).
Performance Commentary - August 31, 2022 For the month ended 31 August 2022, the Plato Global Shares Income Fund (Class A) (‘Fund’) delivered a net yield of 0.3% and a total return of -1.8%. outperforming a weak index (-2.5%). Since inception, the Fund continues to deliver 6% p.a. net yield from global equities, which is 4.3% p.a. more than the Benchmark. This is despite the fall in market yields over recent years.
After the bounce in July, global equity markets resumed the previous downward trend. Despite initial strength, US markets (S&P500 -4.2%. Nasdaq -4.6%) posted a negative month driven by the Feds hawkish stance at Jackson hole and consequent tightening policy. US 10-year bond yields rose as the Fed said they were willing to cause “some pain” to tame inflation and that they were unlikely to reduce rates in 2023. Energy was the strongest sector, conversely the rate sensitive Real Estate sector fell over -4%. The story in Europe was similar, compounded by soaring inflation, a hawkish ECB, and the seeds of an energy crisis (Germany -4.8%, France -5%). There were some bright spots in Asian markets (Singapore +0.3%, Japan +1%). Gold (-3.1%), Crude oil (-9.2%) and the Aussie dollar (AUDUSD -2.1%) all posted a weak month. This was driven by Fed policy, recessionary fears, and a strong greenback comparatively.
Performance Commentary - July 31, 2022 For the month ended 31 July 2022. the Plato Global Shares Income Fund (Class A) l•Funcrl delivered a net yield of D7% and a total return of .4.8%. trailing a strong growth driven index (+6.4%). As per regulation the income that had gone ex dividend. but not been received, in the financial year ending June 2022 has been included in this distribution. Since inception, the Fund has delivered 6% p.o. net yield from global equities. which is 4.3% p.o. more than the Benchmark.
After a significant drowdown in June. global equity markets bounced back. Lower bond yields buoyed longer duration growth sectors. for example IT. which rallied hard into month end. The US S&P 500 (+9.1%) index posted its best month since 2020. with all sectors ending the month positive. After a soft start from the banks, earnings season picked up. consolidated by a strong retail sales print. The ECB delivered its first rate increase in o decode. at the some time that o better than expected reporting season boosted European markets (Germany .5.5%. France .8.9%). A slow down in Chinas growth rate. and concerns over the property sector, resulted in mixed numbers from Asian markets (Hong Kong -7.8%. Japan -5.3%). A strong US dollar hurt gold (-4%) and provided a headwind to the Aussie dollar. Despite this the AUD posted o positive return (+1.2%). assisted in port by strong local employment data. Crude oil (WTI -6.8%) had a volatile month. falling on demand concerns and the weak global growth outlook.
Performance Commentary - June 30, 2022 For the month ended 30 June 2022. the Plato Global Shares Income Fund (Class A) (‘Fund’) delivered a net yield of 0.1% and a total return of —5.5%. trailing a weak index by -0.8%. As normal. a portion of the income is not received until after financial year end. As a result, it will be distributed in July. Since inception. the Fund has delivered 6.0% p.a. net yield from global equities. which is 4.2% p.a. more than the Benchmark.
Global equity markets posted a significant drowdown in the month of June. US equities led the fall. returning the weakest first half of a year since 1970. The clear driver was the energy (-17%) and materials (-14.1%) sectors. Higher than expected inflation data heightened market expectations for future rate increases. Investors became more concerned about the risk of recession. providing a headwind to markets (Nasdaq -8.7%. S&P 500 -8.4%). European markets took a lead from the US. reflecting similar concerns and with resources falling heavily (UK -5.8%. France -8.4%). Asian markets. although down. held up slightly better (Nikkei -3.3%. Singapore -4%). The major Hong Kong index (+2.1%1 even positive, driven by better than expected Chinese data and the easing of their COVID restrictions. Oil was volatile in June. falling due to the same global recession concerns and associated reduction in demand (WTI -7.8%). Gold (-1.6%) held up relatively well as a hedge against inflation. The Aussie dollar was supported by a 0.5% rate rise. but fed hikes provided even more strength to the USD (AUDUSD -3.8%) This reduced the broad market falls. when converting for domestic investors.
The Fund continued to generate strong excess income, driven at the sector level by Financials and Utilities. From a country perspective the driver was the United States. United Kingdom. and Italy. Stock examples of these exposures include US health business. Merck & Co. and Italian financial. Postle Italiane SPA. The Plato model rotates into such companies to benefit from substantial regular and special dividends.
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